Weekly round-up: Indian Steel market remains volatile as prices fluctuate

Indian spot steel trade remained volatile during Week 37 (6 Sept-11 Sept'21). The Indian semi-finished steel market saw volatility in prices. However, domestic billet prices fluctuated by INR 100-300/t; sponge iron prices fluctuated by INR 100-750/t.

This week, the induction furnace finished long steel market observed weak buying enquiries across regions. Re-bar steel manufacturers adjusted tradable prices by INR 100-600/t, w-o-w, except in the western region markets where prices fell sharply by INR 1,500-1,700/t, SteelMint assessment shows.

The domestic HRC market remained stable throughout the week. Major mills rolled over prices for Sept as buyers' expect further decline in prices.

SteelMint's benchmark assessment for 2.5-8 mm IS 2062 HRC remained unchanged at around INR 65,000-66,000/t (exy-Mumbai) and CRC (IS 513 Gr O, 0.9 mm) at INR 75,000-76,000/t (exy-Mumbai).

Iron ore and pellet

• Steel Authority of India Ltd (SAIL) conducted an auction on 10 Sept for 100,000 t of iron ore dump fines from its Bolani iron ore mines in Odisha. The company received bids for the entire material at INR 3,280-3,310/t (ex-mines, including royalty, DMF, NMET and additional premium as per MMDR Amendment Act, 2021), according to market sources. The material put to auction was of Fe 60% grade (indicative).
  
  
• ArcelorMittal Nippon Steel (AM/NS) India has commenced operations at the Ghoraburhani-Sagasahi (Sagasahi) iron ore block in Odisha. The mine has an EC limit of 7.16 mn t/year and 99.59 mn t of iron ore reserves spread over an area of 139.165 hectares in Sundergarh district.
  
  
• JSW Steel had scheduled an auction for 23,700 t of Fe 55%-58% iron ore fines on 8 Sept'21. The auction did not receive any response with the entire material remaining unsold.
  
  
• NMDC has decreased iron ore base prices for its auction from the Donimalai mines by around INR 1,000/t for iron ore fines and lumps.
  
  
• The Karnataka government has put five iron-bearing mines for e-auction, as per latest reports. The Supreme Court had previously cancelled certain 'C' category mines in the state on account of illegal mining and had directed the state government to auction the mines for end users.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 11,300/t DAP Raipur on 10 Sept'21.
  
  
• SteelMint's pellet export index (Fe 64%, 3% Al, FoB east coast) declined $4/t, w-o-w, and currently stands at $132/t. The index has fallen to a 10-month low, as per SteelMint data.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) dropped by $6/t to $38/t FoB east coast India.
  
  

Coal

Australian premium low-volatile (PLV) hard coking coal (HCC) price surged this week to a ten-year high level, on persistent strong demand in Asian markets excluding China alongside limited availability of Oct-Nov laycan spot cargoes.

Nevertheless, buyers having restocking demand are not refraining from buying Australian coking coals, because of decent steel margins despite prices having reached decadal highs. However, some buyers chose to withdraw from the spot market and stay on the sidelines as prices increased sharply.

• Latest prices for the premium HCC grade are assessed at around $336.00/tonne (t) FoB Australia, $492.00/t CNF China and $362.70/t CNF India. Besides, a trade was concluded at $300/t FoB for 75,000 t of Australian Saraji PLV, with mid-Nov laycan.
  
  
• South African RB2 portside prices rose further by INR 700/t on strong demand, averaging at INR 10,500/t ex-Gangavaram.
  
  
• South African RB1 prices remained largely unchanged this week at $153/t. Discounts for RB2 and RB3 were assessed at $18/t and $27/t respectively.
  
  

Ferrous scrap

India's scrap import market remained dull throughout the week as weak demand was observed from end users, with preference tilting toward domestic substitutes - sponge iron and domestically generated scrap material.

On the other hand, container shortage globally is keeping Indian importers sceptical about material deliveries. While demand for scrap in India exists, there is discrepancy in bids and offers, SteelMint learnt from market sources.

• Fresh offers for UK/EU-origin shredded material are at $525/t CFR Nhava Sheva, stable against last week. No firm bookings have been made on these offers.
  
  
• Dubai-origin HMS 1 offers were heard at around $480/t CFR Nhava Sheva, down $5/t CFR, w-o-w.
  
  
• HMS 1&2 (80:20) material from the UAE is being offered at $470/t CFR Nhava Sheva, down $5/t CFR, w-o-w.
  
  

Ferro alloys

The overall domestic market of ferro alloys saw bearish sentiments with manganese alloys, ferro silicon and ferro chrome prices have declined this week.

• Indian silico manganese prices dropped as buyers were showing less interest. Currently, Silico manganese prices for 60-14 grade are witnessing at INR 91,125/t Exw Durgapur and INR 92,500/t Exw Raipur. Most of the exporters are booked while few exporters are offering for 65-16 grade at $1450/t FoB India.
  
  
• Ferro manganese prices from Raipur remained stable with moderate demand. Producers are currently offering at INR 100,300/t Exw Raipur while from Durgapur, only marginal slight in prices by around INR 500/t w-o-w has been assessed by SteelMint. The current market price of ferro manganese is at INR 99,150/t exw Durgapur.
  
  
• According to SteelMint, Ferro chrome prices reduced by INR 5,000/t w-o-w owing to low demand from steel mills in an expectation that prices might fall further. The current market price for Ferro chrome HC 70% is at INR 108,000/t exw Jajpur.
  
  
• Ferro silicon prices took a marginal dip despite better demand. Most of the Guwahati-based producers are sold. Which influenced the buyers to focus on Bhutanese market. The current market price of Ferro silicon is at INR 126,000/t exw Guwahati and INR 124,000/t exw Bhutan.
  
  

Semi-finished

The semi-finished steel market observed volatility in prices as demand was moderate during which led to price fluctuations on floated offers through the mid-sized mills.

Domestic billet prices fluctuated by INR 100-300/t following sponge iron offers that remained volatile. However, in Karnataka, sponge pellet prices rise by INR 300-600/t due fall in sponge production due to plant maintenance amid monsoons.

• SAIL conducted an auction for 8,000 t of prime steel grade pig iron from the Bhilai Steel Plant (BSP) in Chhattisgarh on 14 Sept'21.
  
  
• An export tender for 30,000 t of 150mm (4SP) steel billet was issued by a state-owned mill was reportedly concluded at $620-625/t FOB India east coast.
  
  
• At Vizag Steel's pooled iron auction on 6 Sept'21, the entire quantity of 3,500 t on offer got booked at INR 33,900 /t exw.
  
  
• Vizag Steel Plant conducted an auction for 1,500 t of basic grade pig iron on 4 Sept'21. The entire quantity was booked at INR 38,500/t exw.
  
  
• About 2,000-3,000 t of induction furnace (IF) route billet export deals were confirmed this week at around $553-555/t exw-eastern India (Durgapur and Odisha), equivalent to $580-585/t CPT Nepal. The fresh offers stood at $570/t exw-Durgapur.
  
  
• Steel-grade pig iron prices rose by upto INR 1,000/t across regions due to higher coke prices. Also, some supply shortage reported especially in eastern region, this led to a sharp surge in prices in the region.
  
  
• Indian sponge C-DRI (FeM 80%, lumps 100%) export offers fell by $10-15/t to $450-455/t CPT Benapole, equivalent to $480-485/t CFR Chittagong, Bangladesh. Over 5,000 t deals reported this week on revised prices.
  
  

Finished longs

This week finished long steel market via induction furnace route observed weak buying enquiries and trade activity across the region, and rebar steel manufacturers adjusted tradable prices by INR 100-600/t w-o-w except in western region markets where sharp fall in prices observed by INR 1,500-1,700/t, SteelMint assessment shows. Due to limited demand in the spot market and to maintain price parity with other competitive markets, pressuring rebar sellers to slashes their offers especially in western region, while in other markets also weak demand pushes the manufacturers to maintain their prices as per the movement of semi-finished steel prices and requirement in the market.

• Trade reference rebar steel prices via induction route for Fe 500 grade of 10-25 mm size is assessed at INR 44,400-44,700/t exw Raipur, INR 45,700-46,100/t exw Jalna.
  
  
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 700-1,000/t and trade reference price of 200 mm angle stood at INR 48,500-48,800/t exw Raipur.
  
  
• Trade discounts given by Raipur based wire rod suppliers stood at INR 1,100-1,300/t and trade reference prices stood at INR 44,000-44,200/t exw Raipur, INR 44,500-44,700/t exw Durgapur, size 5.5 mm.
  
  

Finished flats

This week the domestic market prices for hot-rolled coil (HRC) stood stable, breaking-off from the four weeks of continual decline. Major mills had announced a rollover in prices for September month, however, the buyers continued to remain on side lines expecting further decline in prices.

SteelMint's benchmark price assessment for 2.5-8 mm IS 2062 HRC stands unchanged at around INR 65,000-66,000/t (exy-Mumbai) and CRC (IS 513 Gr O, 0.9mm) at INR 75,000-76,000/t (exy-Mumbai) in comparison with the previous week. The prices mentioned, exclude GST @18%.

Overseas demand is still weak from South East Asian countries where the rising cases of virulent covid-19 delta variant is weighing on market activities. However, Indian manufacturers were able to conclude couple of HRC export deals in the Middle East and South Korea earlier this week.

• A private mill booked 20,000-25,000 t HRC for exports to Turkey @915-920/t CFR for end-Sept or early-Oct delivery.
  
  
• Similarly, an export deal was booked for 15,000 t HRC a couple of days back to South Korea @930/t CFR for end-Sept or early-Oct delivery.